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(Kitco News) - Large speculators returned mostly as buyers of precious and base metals futures and options on the Comex division of the New York Mercantile Exchange and the Nymex, but did most of their shopping in the platinum group metals complex, according to U.S. government data.

For the week ended Dec. 11, large speculators in the Commodity Futures Trading Commission’s weekly commitment of traders report saw their net-long positions in platinum group metals rise measurably in both the legacy and disaggregated reports.

Platinum net length rose to a seven-week high and palladium net length hit a record high.

Gold net length rebounded slightly, following the previous week’s sharp drop, but silver saw funds trim their net-long position. Funds added smartly to copper in both reports, feeling more confident about their recent switch to a net-long position.

Metals prices rose during time period covered by the report, which was for the week through Dec. 11. Comex February gold rose $13.80 to $1,709.60 an ounce as of Dec. 11, while March silver gained 20.9 cents to $33.017. January platinum gained $57.10 to $1,640, while March palladium rose $14.10 to $696.80. Comex March copper added 3.1 cents to $3.6865 a pound.

In the current CFTC report data, activity in the PGMs stood out the most. Managed-money accounts in platinum increased their net-long position fairly sharply. They are now net-long 31,791 contracts, having added 2,500 gross longs and cut 804 gross shorts.

Non-commercials in platinum also increased their net-long position, which now is 42,272 contracts, having added 2,181 gross longs and cut 572 gross shorts. Commercials are net-short and increased that position, having added significantly more gross shorts than gross longs.

For both reports, this is the highest the speculative position has reached since Oct. 23. In palladium the managed-money accounts increased their net-long position to 15,475 contracts. They added 1,745 gross longs while also adding 407 gross shorts to raise the net-long position. In the legacy report, non-commercials added 1,696 gross longs and 203 gross shorts, raising their net-long to 17,647 contracts. Commercials added three times as many gross shorts than gross longs, raising their net-short position.

Palladium’s gains pushed the large speculators’ net length above former record territory. For the disaggregated report, the old record of 15,408 set in November 2010. For the legacy report, it was set in August 2011 at 17,277.

With the PGMs reaching such lofty levels, market analysts are beginning to sound alarms that positioning might be overextended.

“This increases the risk of profit-taking given that prices of platinum – and particularly palladium – have seen sharp rises in recent weeks,” said Commerzbank.

Managed-money accounts in the disaggregated report added modestly to gold futures and options, increasing their net-long position to 129,865 contracts. Managed-money accounts added 1,027 gross longs and subtracted 2,765 gross shorts. Producers lowered their net-short position as they added gross longs and cut gross shorts. Swap dealers are net short, having added stoutly to that position by cutting gross longs and significantly increasing gross shorts.

Non-commercials in the legacy report also increased their net-long position, having added 2,242 gross longs and sliced 1,503 gross shorts. They are now net-long 176,047 contracts. Commercials are net-short, having added almost twice as many gross shorts as gross longs.

TD Securities said the CFTC data shows there were some gold investors putting on long positions ahead of the December Federal Open Market Committee meeting which ended Dec. 12, the day after the cut-off for the most recent CFTC data. Considering the selling that occurred following the meeting, TDS said: “As it turns out, these longs were quite weak.”

Barclays’ analysts also noted the data reflects activity in gold before the FOMC announcement, so next week’s data set could change. Overall, though, “speculative interest reflects the lack of conviction in gold seen at the start of the year as year-end approaches,” they added.

Silver net-long positions for the managed-money accounts decreased, falling to 34,862 contracts. The fall came from cutting 1,828 gross longs and adding 161 gross shorts, suggesting the drop came from bulls selling. Producers lowered their net-short position, having cut more gross shorts than gross longs. Swap dealers added to their net-short position by adding more gross shorts than gross longs.

In the legacy report, the silver net-long for non-commercials also decreased. They cut 1,527 gross longs and cut 229 gross shorts. They are now net-long 43,314 contracts. Commercials are net-short, but saw little change in that position.

The copper net-long position for the managed-money accounts rose to 22,123 contracts, as they cut 2,670 gross shorts and added 5,972 gross longs. Funds raised their net-long position in the legacy report, having added 4,282 gross longs and 712 gross shorts. They are net-long 12,605 contracts. Commercials are net-short and added to both sides, having added many more gross shorts than longs.

TDS said funds bolstered their net-long positions on “anticipated Fed easing and better data out of China.”

Commerzbank noted speculators “expanded their net-long positions in copper by 64% to a 2-month high of 22.1 thousand contracts… Two weeks earlier, investors were still in negative mood on balance. Thus money managers have helped to drive the price of copper up over the last two weeks. That said, their profit-taking could put the brakes on any sharp climbs in price.”

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